SEC Proposes Crypto Custody Rule Amendments Amid Growing Institutional Demand
The Securities and Exchange Commission (SEC) has proposed amendments to its Custody Rule for cryptocurrency assets, aiming to provide clarity on who can hold digital assets on behalf of clients. The proposal was submitted to the Office of Information and Regulatory Affairs (OIRA) on August 25, following a White House meeting between President Donald J. Trump and crypto industry executives.
The SEC's move comes as institutional investors continue to show growing interest in cryptocurrency exposure. Institutional Bitcoin ETF holdings rose 7.5% to 535,723 BTC in the second quarter of 2026, despite a 14.2% decline in Bitcoin's price over the same period.
The proposed amendments aim to clarify how investment advisers and companies can hold crypto assets for clients, replacing years of ambiguity with a defined framework. However, even after publication, the proposal will not provide immediate regulatory certainty, as it requires further analysis and a second commission vote before implementation.